Place-Based Impact Investing in Greater Boston

Part of our work connecting and nourishing local economy leaders and funders all over the U.S. and Canada includes watching for emergent trends and patterns locally, that represent larger-scale shifts toward an economy that works for all.

At the intersection of the work of BALLE’s Local Economy Fellows, pioneering funders like those in the Local Economy Investor and Community Foundation Circles, and the communities each represent, one of the growing trends that excites us most is the commitment to shift capital in ways that fundamentally and permanently address local challenges.

In particular, backbone organizations are creating new infrastructure and sharing across their communities and the larger field tools that have worked to scale solutions. Last month, Boston Ujima Project, led by BALLE Fellow Aaron Tanaka and BALLE Local Economy Investors Circle member Deborah Frieze, partnered with BALLE, Solidago Capital, and Transform Finance to host a Place Based Impact Investing Workshop to do exactly that.

This workshop — one of a series BALLE is developing alongside local leaders and field experts — was built on the Ujima Project’s incredible foundation of engaged community leaders. Local funders, investors, entrepreneurs, and patrons came together to recognize gaps in the current financial ecosystem and to learn new skills to address them.

Place-Based impact Investing Workshop participants considered, among other things, how mission-related investing criteria impacts the sustainability of a business.

Before you can fix a problem, you have to understand it in context. The workshop first examined the ways that economic “plumbing” currently accelerates or prevents the flow of community capital. In Boston, the kinds of businesses that communities and investors want to seed and grow encounter structural discrimination in many ways. Minority-owned businesses are more likely to be denied lending and receive smaller loans at higher interest rates. Similar to national trends, only 3.7 percent of businesses led by women and people of color have access to angel or venture capital. Depending on the source, the average net worth of a black family in Greater Boston is as little as $7, and for white families, goes up to $250,000.

After getting a sense of local breakdowns, workshop participants moved into understanding how investors go about building portfolios — while simultaneously imagining the ideal investable environment in Boston. This included exploring alternatives to traditional models of debt and equity investment, which often lead entrepreneurs down a path of debt that compromises the financial health of the business. People were also able to get a sense of what it takes for an enterprise to be investable, diving into spreadsheets and models and considering how different kinds of mission-based requirements impact the long-term sustainability of a business.

“Usually with a community workshop people oversimplify
the knowledge. I felt like we were being taught in a way that
honored our knowledge and leadership.” -Workshop Participant

One of the most vital and exciting aspects of the Ujima Project is the Community Capital Fund they are establishing to directly resource the entrepreneurs and organizations who can deliver the most value to their communities. The fund allows foundations, philanthropists, and investors to pool their resources, distribute liability, and aggregate capital that can have a much greater catalytic effect than any one effort could achieve alone. Initial investments will target small businesses, land trusts, and affordable housing.

The Ujima Project has been in development for more than two and a half years, and the maturity of the ecosystem they’ve cultivated allowed for a robust, tangible, and actionable series of exercises. On the cusp of hiring its first Project Fund Manager, there is an opportunity for Ujima to apply what participants learned during the workshop and move toward a healthier, more equitable local ecosystem right away.

“The presentations were fantastic! Andrea and Jeff are so knowledgeable.
They presented essential information in a way that was accessible and always
bringing it back to the mission and goals.” -Workshop Participant

BALLE looks forward to evolving the Place-Based Impact Investing Workshop with its partners to continue serving the needs of specific communities, while building on a strong foundation and curriculum of best practices. Look for news about our next event this fall in Chattanooga, TN.